(Reuters) – MGIC Investment Corp’s risk-to-capital ratio breached the level considered safe by regulators and the mortgage insurer posted its eighth straight quarterly loss.
At June 30, the preliminary risk-to-capital ratio of its combined insurance operations was 30 to 1. Mortgage insurance regulators commonly allow for a maximum risk-to-capital ratio of 25 to 1.
The Wisconsin Insurance Commissioner, which is MGIC’s primary regulator, uses a minimum policyholder position (MPP) to gauge the health of an insurer. MPP is the minimum amount of money an insurer would need to meet claims.
MGIC failed on that count too. Its preliminary policyholder position was $211 million below the required MPP of $1.3 billion.
At the end of the previous quarter, the preliminary policyholder position exceeded the MPP by $197 million.
MGIC’s second-quarter loss widened to $273.9 million, or $1.36 per share, from a loss of $151.7 million, or 75 cents p er share, a year earlier.
Losses incurred rose 20 percent to $551.4 million.
The rise was primarily a result of an increase in the claim rate on late stage delinquencies.
The company has posted just one quarter of profit in the last 4 years.
The Milwaukee-based company’s shares, which traded at the $65 levels in 2007, closed at $2.45 on Wednesday on the New York Stock Exchange.